Legislature Passes Major N.Y. Reform Initiatives

Legislature Passes Major N.Y. Reform Initiatives
School Districts, Public Authorities Would Gain Enhanced Financial Accountability and Oversight

By Jay Dismukes

Continued from the Home Page

On June 21, A.6082-B, sponsored by Assemblyman Thomas DiNapoli (D–Great Neck), and based on the five-point plan developed by State Comptroller Alan Hevesi’s School Accountability Coalition, in which the Society participated, passed both the New York State Senate and Assembly. The bill calls for requiring training of school board members in their financial oversight responsibilities, establishing an internal audit function in school districts, creating audit committees, mandating competitive bids when schools engage outside auditors, and involving school boards more closely in the external auditing process and in maintaining internal controls. The Assembly bill originally required rotation of lead and reviewing audit partners every five years on school district audits, but was amended to conform to the competitive-bid provision found in S.5050-A, which Sen. Steven Saland (R-Poughkeepsie) sponsored and which also drew heavily from the comptroller’s five-point plan.

On the same day, the Senate and Assembly also passed DiNapoli-sponsored A.6761-B, which would direct the state comptroller to conduct fiscal audits of each New York school district, board of cooperative educational services, and charter school every five years. The legislation, the Senate version of which is S.890-B, sponsored by Carl Marcellino (R-Syosset), would give Hevesi’s office access to $2.9 million to help hire and train additional audit staff.

Both A.6082-B and A.6761-B await Gov. George Pataki’s approval and signature to become law, helping to prevent the kinds of problems that took place on Long Island, which so far have resulted in the theft of millions dollars in taxpayer money and the arrests of several school officials.

The Society’s Public Schools Committee will be working with the State Education Department and the comptroller’s office to develop implementation procedures.

Public Authority Reform

That same week, the Senate and Assembly also passed S.5927, sponsored by Vincent Leibell (R-Patterson), which seeks to improve the oversight, accountability and transparency of the state’s 700-plus public authorities and subsidiaries through statutorily requiring them to implement and abide by a set of uniform principles. As reported in the April 1, 2005, issue of The Trusted Professional, public authorities are responsible for approximately $43 billion of public debt, according to state estimates, and there is wide recognition in Albany that old laws need to be changed, Leibell said.

The principles included in the Public Authorities Accountability Act of 2005 would impose stricter governance rules for public authority boards, including training of board members on their different responsibilities, the separation of oversight and executive functions, independence guidelines, and the establishment of audit and governance committees as well as codes of conduct, among other stipulations. The act also would mandate public disclosure of authorities’ financial reports, the establishment of a budget office and independent inspector general, and new protocols for disposing of public authority property.

S.5927 also awaits the governor’s approval.